Digital Commerce and the Customer Experience: Top Trends for 2020
For all of the prognosticators out there trying to predict which digital commerce brands and retailers will be the winners and losers in 2020, there’s a simple litmus test: the customer experience.
Without a doubt, succeeding in 2020 will require companies to have 20/20 vision into how consumers want to experience a brand — both online and offline.
While this may sound like a massive challenge, I believe there's good news on the horizon. Success in 2020 will be less about chasing the latest shiny object, and more about today’s existing technologies and tactics finally maturing and becoming mainstream. In fact, I see the biggest promise in three distinct areas that are not new, but are just now seeing the innovation and evolution that will enable them to drive real impact on digital commerce this year:
- subscription purchasing;
- individualization; and
- augmented reality (AR) and virtual reality (VR).
Across all three areas, a common theme will emerge: The winners in these categories will be the companies that solve the ongoing challenge of optimizing the customer experience. Let’s explore these ideas further.
The $2.6 billion subscription box industry isn’t new, but creative new subscription purchasing models will play a significant role in digital commerce in 2020 because they put customer experience at the center of every transaction.
A prime example in this space is Hotel Chocolat, a U.K.-based retailer that offers a range of award-winning chocolates and luxury chocolate gifts via its “exclusive” Monthly Tasting Club. More than 55,000 members pay for the privilege to try Hotel Chocolat’s latest recipes before they become available to the general public, thanks to a monthly selection delivered right to the member’s door.
Hotel Chocolat’s unique take on the subscription model turns both loyalty and R&D on its head. The company’s loyalty program becomes a valuable revenue driver that also delights its members (who feel part of a private club) and generates invaluable customer feedback (as members test and react to the company’s latest product launches).
I believe we will continue to see creative success stories like this in 2020, as more brands and retailers shift their focus from monthly deliveries of product and instead put their attention on finding unique ways to meet the needs, aspirations and experiences of their customers.
Every consumer wants to have something that's unique to them. The more complex the product, the more important it becomes to the consumer to be able to configure the product the way they want. Delivering on this will be a major challenge for brands and retailers in 2020. Suddenly, rather than looking at segments of thousands of consumers, we’re essentially talking about a segment of one. In other words, brands and retail leaders will need to shift their mind-sets from personalization to individualization. But how does a company individualize at scale?
Beauty and fashion brands have a natural opportunity to do this. Cosmetics company Tarte Cosmetics, for example, enables its loyalty club members to extensively personalize their profile by adding such details as hair color, eye color, skin type, and preferred foundation shades. This data enables Tarte Cosmetics to present individualized product options the next time the customer visits the brand's website.
The secret here is relevance. It’s also about knowing intimately what each customer wants — or providing them the opportunity to tell brands and retailers what they want.
Augmented Reality and Virtual Reality
After years of hype that never quite materialized, 2020 will be the year that AR and VR in digital commerce settings explode in popularity. ABI Research forecasts that AR will influence as much as 3 percent of digital commerce revenue by 2020, and that more than 120,000 stores will be using AR globally by 2022.
Already, 10 percent of U.S. consumers have used an AR app or feature to virtually try on clothes or see how furniture would look in their homes, according to a 2018 survey conducted by Adtaxi. More tellingly, a whopping 67 percent of survey respondents said they’d be willing to never shop for clothes in a traditional store again if AR made it possible to do so.
The potential of AR and VR is nearly unlimited, primarily because they hold the promise of dramatically enriching the customer experience and enabling consumers to immerse themselves in a brand experience — while simultaneously giving consumers complete control over how they experience the brand.
Key Issues Impacting These Trends
Although these trends are exciting, they’re also not easy to master. Brands and retailers will need to dig deep to navigate substantial complexities around each of these trends.
The secret to delivering an individualized customer experience has always been data. In 2020, successful companies will leverage data in new and creative ways to make every customer interaction consistently amazing, regardless of channel.
This will require companies to be able to obtain a true 360-degree view of the customer, which in turn requires relevant data. The data already exists, but the trick will be to bring it together and deliver it where it’s needed, so that every in-store rep, call-center employee, marketer and product manager are more intelligent and able to deliver a cohesive, superior, connected customer experience.
Privacy and Ethics
As companies expand upon the ways they leverage their customer data, the ethical implications of implementing new technologies will grow more complex. The question companies will have to ask themselves is, “just because we can do something, should we?”
For example, a company could mine information about a customer that's publicly available, such as the customer’s Facebook feed. If the company also has data from an app that uses facial recognition, it could theoretically identify a customer in a crowd and strike up a branded conversation about a product he or she just bought.
Doing this may be technically possible, but is it ethical? Is it legal? Is it creepy? While this may be an extreme example, brands and retailers need to be proactively thinking about these types of questions before they encounter legal issues.
Even today, organizational silos persist in far too many corporate cultures. But in the coming year, brands and retailers will continue to make strides in breaking down these artificial walls to ensure a connected customer experience, no matter where the customer shops.
Plenty is at stake. No company wants to send its customers an email with a great promotion that the customer excitedly takes to a brick-and-mortar store, only to find that the in-store staff know nothing about the offer. As internal corporate silos dissolve into true cross-channel cooperation and collaboration, the upside will be enormous.
See You in 2020
It’s clear that 2020 will be the year of the customer experience. In this era when companies can choose from an overabundance of fancy technologies and innovations to implement, smart brands and retailers could almost plan their entire business strategy by asking a single, simple question: Does this new idea we’re considering improve our customer’s experience?
If it does, go for it. If it doesn’t, keep looking.
So, stop wondering about the latest technology coming down the pike. Ignore those shiny objects. Instead, think about the outcome you’re trying to achieve. Is your new initiative helping your customers solve a problem? Does it make your customers feel valued? Will it inspire loyalty and dedication?
Answering these questions will invariably lead you to continually improve your customer experience. And that, my friends, will be the key to customer experience success in 2020 and beyond.
Richard B. Lyons is executive vice president at Capgemini’s Digital Customer Experience Practice.
Related story: Retailers’ Mobile Customer Engagement Mandate for 2020
Richard B. Lyons is Executive Vice President at Capgemini’s Digital Customer Experience Practice.
Rich founded Lyons Consulting Group (LYONSCG) in 2003 and it was acquired by Capgemini in 2017. Prior to founding LYONSCG, Rich served as Vice President of Sales for divine, Inc. in Chicago. He served in that same role as part of marchFIRST and Whittman-Hart. Rich graduated Summa Cum Laude with a BSEE from the University of Michigan and holds an M.B.A. from J.L. Kellogg Graduate School of Management at Northwestern University.